Mumbai: The voting pattern at Tata Consultancy Services Ltd’s extraordinary general meeting (EGM) on Tuesday shows Tata Sons by virtue of having a lion’s share of 73% in India’s largest IT services company managed to remove Cyrus Mistry as TCS director. But in order to ensure the percentage of votes that are cast against the resolution are lesser at the forthcoming EGMs, it may have to toil harder.

Here is why.

The numbers are clearly stacked in favour of Tata Sons—of the 86.71% who voted, 93.11% backed the resolution and voted for his ouster.

However, what is interesting is the stance taken by non-promoter shareholders—about 43% of institutional investor votes and 78% of retail investor votes were against the resolution.

While the minority shareholders’ vote couldn’t skew the numbers in favour of Mistry, it sends out a message that Tata Sons needs to work harder to ensure a win in the forthcoming meetings, said Shriram Subramanian, founder and managing director at InGovern Research.

“Almost 6% of the voting capital voted against the resolution and there’s a possibility that this percentage may go up. Tatas need to take it seriously as it’s not a small number as these are large institutional investors," he said. Subramanian’s firm recommended shareholders to vote against the proposal.

As on 6 December, the cut-off date, TCS had 64,884 shareholders. In the remaining six big listed firms Tata Sons’ stake is less than 30%, making the way institutional shareholders vote, very critical.

To be sure, the challenge ahead is not lost on Tata Sons.

In a bid to have an edge at the forthcoming EGM, the holding company on Tuesday increased its stake in Tata Motors Ltd to 28.71% from 26.98% earlier. It bought 50 million shares of its flagship company, in a bulk deal for Rs2,430.65 crore, National Stock Exchange (NSE) data showed. It bought shares at Rs486.13 each—a 7% premium to Monday’s closing price of Rs454.4.

From here on, from global investors’ perspective, the company’s performance is going to be monitored closely as there’s not enough information about what exactly transpired and why Mistry’s ouster is beneficial to shareholders said Suken Bhandari, Principal Advisor at ISS Corporate Solutions, a corporate governance and remuneration consultancy. ISS had recommended shareholders to vote against the resolution. “Going ahead, if there are indications of excessive consolidation of control, it will be monitored very closely, as too much control is not good corporate governance in light of the lack of transparency with what has transpired."

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ISS recommended the minority shareholders as neither Tata Sons Ltd as the proponent nor the TCS board provided the shareholders with “compelling reasons". The minority shareholders, it added, are more concerned about Mistry’s impact at the company level rather than at the group level.

After Tata Sons removed Mistry as its chairman on 24 October, it expected him to step down from the boards of listed firms. Mistry refused to do so and the holding firm has been forced to call shareholder meetings to eject him.

A statement from Mistry’s office on Tuesday night termed TCS voting pattern a “big moral victory for Cyrus and governance".

Also read: Cyrus Mistry-Ratan Tata spat: A look at how the events unfolded

Almost 20% of shareholders of TCS that accounts for more than 70% of non-promoter shareholders supported Cyrus by voting against the resolution or abstained (expressing their disapproval of the promoter actions), Mistry’s office said in the statement.